French parliament pushes for HFC tax adoption

MPs from France’s governing parties have reinserted a proposed HFC tax into the 2019 Finance Bill. But the tax may not survive parliamentary debates over the adoption of the bill.

A proposed HFC tax and support mechanism for companies using natural refrigerant-based technology have reappeared in France’s 2019 Finance Bill as an amendment supported by French President Emmanuel Macron’s LREM party and its coalition partner MoDem.

The amendment aims to introduce a progressive tax levied as of 1 January 2021 on producers and importers of HFCs. The tax is set at 15 euros per ton of CO2 equivalent (€/tCO2e) in 2021, €22/tCO 2e in 2022, €30/tCO2e in 2023 and €45/tCO2 e in 2024.

If adopted in parliamentary debates, the HFC tax scheme will also update the corporate tax code. Companies subject to corporation tax or income tax under a real tax regime may deduct from their taxable profit an amount equal to 40% of the original value of all natural refrigerant-based refrigeration and air conditioning equipment.

This discounted tax rate applies to companies acquiring new natural refrigerant-based equipment from 1 January 2019 until 31 December 2022.

The proposed measures still need to be approved in parliamentary debates. Final votes will take place at the end of December 2018.